NAO: Universal Credit won't ever deliver value for money, but there's no longer an alternative

Oversight body says it would be too complex and expensive to reverse DWP's troubled benefits system rollout

Universal Credit is likely to never deliver value for money and could even cost more than the current benefits system, according to the National Audit Office (NAO), but admits there is no alternative than to the flawed system.

In a 79-page report savaging the Department for Work and Pensions' (DWP) approach to rolling out Universal Credit, the NAO highlighted the department's failure to manage the rollout of its new digital system, dubbed full service, as well as its lack of sensitivity towards claimants facing hardship.

The independent Parliamentary auditors also said that despite the department's agile approach to developing systems and managing the programme, it has needed to slow the rollout of its full service IT system to job centres three times since July 2016.

"The department has kept pushing the Universal Credit rollout forward through a series of problems. We recognise both its determination and commitment, and that there is really no practical choice but to keep on keeping on with the rollout," said NAO head Amyas Morse.

The report concluded that, despite the fact Universal Credit could end up costing more than the legacy system it will eventually replace, changes implemented across the department and in job centres across the country are now too complex to reverse.

"Its incremental approach has led the department to make many changes to its job centres, its digital systems and the working practices of the 12,000 people working on Universal Credit," the report said.

"As it has rolled out Universal Credit to more claimants and areas, these changes have become increasingly embedded across the department. It would be both complex and expensive to revert to legacy benefits at this stage."

Despite responding to simple ideas to improve the digital system, the report criticised the DWP's unwillingness to be held accountable, and that "it does not accept that Universal Credit has caused hardship among claimants", while there has been a noted increase in the use of food banks in at least some areas where the full service system has been introduced.

The DWP has often dismissed evidence of claimants' difficulties and hardship "instead of working with these bodies to establish an evidence base for what is actually happening", and does not know how many claimants are having problems with the programme - with one-fifth of claimants still not being paid on time.

"We don't think DWP has shown the same commitment to listening and responding to the hardship faced by claimants," Morse continued. "Maybe a change of mind set will follow the publication of the claimant survey on 8 June. We think the larger claims for Universal Credit, such as boosted employment, are unlikely to be demonstrable at any point in future. Nor for that matter will value for money."

The DWP initially planned to transfer eight million households across Britain to Universal Credit by October 2017, as a return for a 2.2 billion investment, with 300,000 more people moving into work as a result - alongside reducing fraud and error by 2.1 billion, and making administration savings of 400 million.

But now, partially as a result of problems that arose in early development with regards to governance, contractors, and developing a full working system - with the programme being reset in 2013 - the DWP has only transferred 10%, approximately 815,000, of the final expected caseload to Universal Credit.

Following the 2013 reset, the DWP decided to take a dual-track approach to rolling out its new benefits system, with the long-term digital system working in conjunction with live service, which had been built before the reset.

This approach was deemed more expensive, but the DWP expected that rolling out live service would reduce risks, and bring forward many of the benefits. Live service was closed to new claimants in 2017, and the department expects to fully decommission it in July 2019.

Despite spending 1.9 billion to date, comprising 1.3 billion on investment and 600 million on running costs, the DWP doesn't expect to complete the rollout until 2023, with just 490,000 currently enrolled onto full service.

A Universal Credit report from the NAO published four years ago said the DWP's 'test and learn' approach should allow it to learn from experience and improve the design and readiness of the services, but warned there was no contingency plan should there be further delays.  

IT Pro has approached the DWP for comment.

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